Supreme Court Justices Weigh Health Care Law

A protester holds up a copy of the U.S. Constitution outside the Supreme Court on Monday in Washington, D.C.

Brendan Smialowski
/ AFP/Getty Images

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The U.S. Supreme Court signaled Monday that it likely will resolve the constitutional challenge to the Obama health care overhaul, sidestepping the procedural issues that could derail the case until 2015.

The first of the three days of arguments proved, as expected, to be arcane, dense and probably unimportant in the long run. At issue was whether the court could decide the constitutional challenge to the health care law at this point, since to do so would violate the general rule requiring people to pay their taxes first, and then litigate any objection later. That rule was enacted by Congress in 1867 to ensure a steady flow of revenue to run the country. But the court has allowed exceptions to the rule, and during Monday's arguments, the justices seemed inclined to view this case as one of those exceptions.

Because the Obama administration and the challengers want the case resolved now, the justices appointed lawyer Robert Long to defend the proposition that the court should wait to hear any challenge until a penalty is paid in 2015, after the individual mandate kicks in.

Long, however, faced considerable skepticism.

Justice Sonia Sotomayor, for instance, asked what the harm would be if the constitutional challenge is resolved now, before any tax penalty is paid.

"What is the parade of horribles that you see occurring?" she asked.

Lawyer Long responded that the government would face a flood of legal challenges to other taxes, thus tying up revenue collection in the courts for years.

Justice Antonin Scalia, tongue firmly in cheek, disagreed. "What's going to happen is you are going to have an intelligent federal court deciding whether you are going to make an exception ... and there will be no parade of horribles because all federal courts are intelligent."

Is The Penalty A Tax?

The justices asked Long why the penalty provision in the health care law is a tax at all, since there is no punishment for failure to pay it.

He replied that the tax penalty is calculated by the IRS, based on income, and collected by the IRS at the time taxes are filed.

Solicitor General Donald Verrilli Jr., arguing for the government that the case should go forward, seemed to have a slightly easier time of it, except for one particularly thorny question from Justice Samuel Alito.

"[Solicitor] General Verrilli, today you are arguing that the penalty is not a tax," Alito said. "Tomorrow you are going to be back and you will be arguing that the penalty is a tax."

Verrilli replied that penalties enacted under the congressional taxing power are not necessarily taxes.

Gregory Katsas, representing the challengers, also argued that the court should go ahead and rule on the constitutionality of the law without waiting for someone to be assessed a penalty.

More Sparks To Come

His argument prompted Justice Stephen Breyer to challenge Katsas on Congress' intent when it passed the 1867 law.

"One thing that's relevant in my mind is that taxes are, for better or worse, the life's blood of government," Breyer said. Congress quite reasonably usually requires people to pay their taxes before challenging them in court because to do otherwise would mean that "500 federal judges" would "be substituting their idea" of when there should be an exception to the tax law. By requiring people to pay first and litigate later, he suggested, Congress was ensuring a more orderly process.

Katsas answered that the challengers don't dispute the constitutionality of the tax penalty in the Obama health care law; the challengers only contest the mandate. Chief Justice John Roberts didn't seem to buy the argument.

"Why would you have a requirement that is completely toothless?" he asked. "You buy insurance or else. Or else what? Or else nothing."

If Monday's argument was a hallmark of legal gibberish, Tuesday's argument challenging the constitutionality of the individual mandate is likely to provide plenty of fireworks.

The lawyers have already laid the fuses. Tuesday the justices will light them.

Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

Transcript

ROBERT SIEGEL, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

MELISSA BLOCK, HOST:

And I'm Melissa Block. After months of anticipation and preparation, the arguments began with the usual formality.

CHIEF JUSTICE JOHN ROBERTS: We will hear argument this morning in case number 11-398.

BLOCK: The Supreme Court began hearing three days of arguments on the federal health care law.

SIEGEL: The justices' decision could have a major impact not only on the law but on the upcoming presidential election. And as evidence of the gravity of the case, the court has released same-day audio of today's proceedings - something it rarely does. NPR legal affairs correspondent Nina Totenberg has the story.

(SOUNDBITE OF DEMONSTRATION)

NINA TOTENBERG, BYLINE: Outside the court, there were demonstrators chanting, singing and even presidential candidate Rick Santorum. Inside, the court added close to 100 chairs to accommodate as many bigwigs and members of the public as possible. But the dark-suited men and women who sat thigh to thigh in the crowded courtroom were as quiet and well-behaved as kids on the first day of school. The Obama health care law requires all Americans by 2014 to have health care coverage of some sort - Medicaid, Medicare, employer-provided - or if none of these, then you have to buy it individually, or you pay a penalty assessed on your income tax.

The legal problem before the Supreme Court today is that the general rule for challenging taxes or tax penalties is pay first, litigate later. And since nobody will be assessed a penalty until 2015, the question before the court was whether the challenge to other provisions of the law, namely the individual mandate, can proceed. Now, this is where you might expect to hear some riveting argument from the first day with the justices and lawyers engaging in Olympic-style verbal jousting - think again.

JUSTICE ELENA KAGAN: So Reed Elsevier seems in multiple respects on all fours with this case. Why is that wrong?

SOLICITOR GENERAL DONALD VERRILLI: I don't think so, Justice Kagan. We think the closest analogue is the very next provision in the United States Code - 7422(a) - which this court has held is jurisdictional and is phrased in exactly the same way as 7421(a).

TOTENBERG: That exchange between Justice Kagan and Solicitor General Donald Verrilli was what it sounded like for most of the hour and a half of argument this morning. The bottom line, however, appeared pretty clear: the justices seemed inclined not to be sidetracked by the 1867 law that generally requires taxes to be paid before they can be challenged in court. Both the administration and the challengers want the case to go forward for different reasons. So the justices appointed lawyer Robert Long to defend the proposition that the court should wait to hear any challenge until a penalty is paid in 2015 after the mandate kicks in. Long, however, had a tough time. Justice Sotomayor wanted to know what would happen if, in this case, you could litigate first and pay later.

JUSTICE SONIA SOTOMAYOR: What's the parade of horribles that you see occurring?

TOTENBERG: Justice Scalia followed up, tongue firmly in cheek.

JUSTICE ANTONIN SCALIA: What's going to happen is you're going to have an intelligent federal court deciding whether you're going to make an exception. And there will be no parade of horribles because all federal courts are intelligent. So...

(SOUNDBITE OF LAUGHTER)

TOTENBERG: Justice Breyer noted that taxes, for good or ill, are the lifeblood of government, but he wondered since there's no punishment for a failure to pay the individual mandate penalty and since Congress specifically did not call the penalty a tax, why is it, in fact, a tax? Long responded this way.

ROBERT LONG: The amount of the liability and whether you owe the liability is based in part on your income. It's assessed and collected by the IRS.

SCALIA: There's at least some doubt about it, Mr. Long, for the reasons that Justice Breyer said. And I thought that we had a principle that, unless it's clear, courts are not deprived of jurisdiction. And I find it hard to think that this is clear.

TOTENBERG: That last was Justice Scalia again. Solicitor General Verrilli, arguing for the government that the case should go forward, seemed to have a slightly easier time of it, except for this very thorny question from Justice Alito.

JUSTICE SAMUEL ALITO: General Verrilli, today, you're arguing that the penalty is not a tax. Tomorrow, you're going to be back, and you'll be arguing that the penalty is a tax.

TOTENBERG: Verrilli replied that penalties enacted under the congressional taxing power are not necessarily themselves taxes. Representing the challengers, lawyer Greg Katsas also argued that the court should go ahead and rule on the constitutional questions without waiting for someone to be assessed a penalty. The challengers don't dispute the legality of the penalty, he said, only the mandate. Chief Justice Roberts didn't seem to buy that argument.

ROBERTS: Why would you have a requirement that is completely toothless? Pay, you know, buy insurance or else. Or else what? Or else nothing.

GREG KATSAS: Because Congress reasonably could think that at least some people will follow the law precisely because it is the law.

TOTENBERG: If today was a hallmark of legal gibberish, tomorrow's argument challenging the constitutionality of the mandate is likely to provide plenty of fireworks. The lawyers have already laid the fuses. Tomorrow, the justices will light them. Nina Totenberg, NPR News, Washington. Transcript provided by NPR, Copyright National Public Radio.